Lyft Stock Jumps After Founders Say Profits Could Come Sooner Than Expected
Lyft shares are trading higher after the company said it expects to reach profitability on an adjusted Ebitda basis by the fourth quarter of 2021, a year ahead of current Wall Street expectations. Founders Logan Green and John Zimmer made the forecast Tuesday at The Wall Street Journal Technology conference in Laguna Beach, California.
Lyft (ticker: LYFT) shares jumped 7.9% on the news, to $44.09.
The company said the measure doesn't include stock-based compensation. Ebitda stands for earnings before interest, taxes, depreciation, and amortization.
Shares of both Lyft and Uber (UBER) have been hampered this year by concerns about whether the economics of the ride-sharing business offers a real "path to profitability."
See also: IPOs Have Been Crushed in 2019. Why That's Actually Good News for Stocks.
Green said that the market is "competitive but increasingly rational," with reduced ride discounting.
Asked about the stock's weak post-IPO performance-Lyft shares are down 38% since the company went public at $72 in April-the executives cited a shift in investor preference toward value from growth, rather than any changes in Lyft's fundamental performance.
Write to Eric J. Savitz at [email protected]
Stock Markets 30 minutes ago (Oct 22, 2019 12:59PM ET) (NASDAQ:) shares jumped Tuesday after Lyft's co-founders said they believed they would hit profitability in the fourth quarter of 2021, a year
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